WASHINGTON—Two-thousand-and-sixteen was a year in which regulatory relief for credit unions did not come from Capitol Hill, but instead from a regulatory agency, NCUA, largely in the form of new field of membership and member business lending rules, as well as a lighter exam schedule.
But NAFCU expects that may change this year, where a Republican Congress and administration are expected to may steps to reduce credit union regulatory burden.
“For the last few years, legislative gridlock has been the theme on Capitol Hill as various viewpoints could never see eye to eye,” said NAFCU EVP-Government Affairs and General Counsel Carrie Hunt. “Despite this, there were credit union victories on the legislative front. But clearly, most of the regulatory relief has happened on the regulatory front—with extended exam cycles, field of membership flexibility, and MBL modernization being the highlights. In fact, at the last board meeting of 2016, NCUA finalized its Fixed Assets rule, which NAFCU has strongly pushed for and supported.”
Hunt said that while there will be opportunities for additional victories with regulators this year, Congress is likely to take a fast-moving approach during the first 100 days of the new administration.
“NAFCU is optimistic that our allies on the Hill will urge the adoption of a number of credit union relief provisions during their drive to reform the Dodd-Frank Act,” she said. “I think everyone is optimistic that we could see regulatory relief this year—any new administration always has a very robust agenda. It is NAFCU’s goal to do whatever we can to protect credit unions’ interests. In the past there has been more attention (in Congress) to bank issues and we certainly do not want credit union issues to take a back seat to bank issues.”
NAFCU Optimistic
Hunt said NAFCU is optimistic, as well, that reg relief will continue to come from NCUA in 2017.
“If Board Member (Mark) McWatters becomes chairman, we will certainly be asking him to continue to look at other issues we feel need to be addressed,” said Hunt. “NAFCU still thinks risk-based capital is a burden on credit unions. We are strongly opposed to NCUA’s proposed joint rulemaking on incentive-based compensation. And there are other issues that we will speak with the agency about to create positive change for credit unions.”
Hunt believes it is too early to predict where, and if, regulatory relief will come from the CFPB, as too much remains undecided within that agency, she said.
Carrie Hunt, NAFCU
“Right now it’s difficult to say what might transpire, given the current state of the CFPB,” said Hunt. “Will the Bureau this year have a single director or a board? Will the director be (Richard) Cordray or another appointee? But we do think there will be opportunities for changes.”
Hunt added that, as always, NAFCU will be watching tax reform legislation and “vigorously” protecting the CU tax exemption.
Looking back on the results of NAFCU efforts on Capitol Hill and in Alexandria, Va., last year, Hunt believes NAFCU accomplished a lot.
“We made solid progress on both sides,” Hunt said.
Choice Act
On the legislative side, Hunt said the introduction of the Choice Act was a positive step and was driven in part by NAFCU working with Congress throughout the years to flag and lobby issues that needed to be changed for credit unions. Hunt said that NAFCU believes a few areas of the Choice Act need additional work.
“In general we feel that this is a very positive sign that Congress has been working on regulatory relief for credit unions,” Hunt said.
Progress, too, was made on data security, particularly in developing standards for CUs, said Hunt.
“There has been a lot of discord relative to what these solutions for data security should be. But behind the scenes, for the first time, we did see more agreement on implementing data security standards for credit unions,” she said.
“We also saw the introduction of the Financial Services for the Underserved Act, which would allow credit unions to add underserved areas to their fields of membership . . . While we did not see a lot of legislation (to support credit unions) being passed this past year, the amount of attention from both sides of the aisle and in both chambers on credit union issues was strong. We look to continue this work in the next Congress.”
Pointing out again the work of NAFCU in 2016 to help credit unions gain new FOM and MBL rules, Hunt said the trade association this year will be just as active with NCUA.
“NCUA changing member business lending and field of membership rules is huge for credit unions,” said Hunt. “Also, NCUA not backing down in the face of litigation from the ICBA and ABA is incredibly important. It shows that the industry and the regulator are united in making sure credit unions have every tool at their disposal to reach American consumers.”
CFPB Outlook
Looking at the CFPB, Hunt said that NAFCU had some success in swaying the Bureau to issue guidance relative to the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosure (TRID).
“They reconsidered some issues and are taking their time promulgating rules relative to payday lending,” said Hunt. “We think the CFPB has been hearing our concerns more than they have in the past. But the CFPB still remains a huge concern for our members due to the unintended consequences of their rules—especially relative to the Military Lending Act.”
For NAFCU’s complete list of 2017 priorities, visit CUToday.info’s The gov.